VIETNAM: New labour law tightens up on foreign firms

Foreign companies setting up production bases in Vietnam will have to take additional care when hiring staff because of a new labour law decree, a union official has told just-style.

Dr Tran Thi Thanh Ha from the labour relations department of the Vietnam General Confederation of Labour stressed that the new 'Decree No 03/2014', which came into force on 15 March would increase controls strengthened last year by another law (Decree No 39/2013).

She said: "The one in 2013 is for the government [labour ministry] inspecting department to control local and foreign investment, and the new one is to control the employment and recruitment processes of both local and foreign-invested enterprises."

Hien Dang, a Ho Chi Minh City lawyer, said the increased hiring oversight was a reaction to abuses by foreign-owned companies: "Some Korean and Singaporean companies in Vietnam recruited workers without complying with the procedures in Article 168 of the Labour Code [which covers foreign employers]."

Subsequently there were salary disputes with the workforce and strikes, she noted, which had prompted to government to tighten recruitment rules.

Dave Quach Toan, director of Viet Thanh Long Textiles Co Ltd, which is planning to launch a clothing manufacturing joint venture with South Korea's Bo Kwang Co Ltd next month [June], was optimistic his company would not encounter problems because of the decree. His company's partners are "very good to the workers", he said, adding: "Garment manufacture isn't just about the machines..."